US dumping Iran deal will push oil up, hit India: Assocham

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Last Updated: Thu, May 10, 2018 10:39 hrs

New Delhi: A day after President Donald Trump withdrew the US from the Iran nuclear deal and decided to re-impose sanctions on Tehran, industry chamber Assocham said on Wednesday that the move will hit the Indian economy due to its likely upward impact on oil prices.

Iran is a major oil producing country.

"President Donald Trump pulling out of the Iran deal and announcing his decision to re-impose sanctions on the key crude oil producer would exert pressure on the fuel prices and affect the Indian economy on the downside," Assocham Secretary General D.S. Rawat said in a statement.

"While there are other imponderables like Saudi Arabia trying to increase crude output along with major OPEC (Organisation of Petroleum Exporting Countries) producers and the US allies like France not being on board, the global economy does face bouts of uncertainty and volatility.

"In the short term, it is not a good news for the Indian economy which meets the bulk of its crude oil requirements from imports," he added.

Trump said on Tuesday that the US would withdraw from the "horrible, one-sided deal that should have never, ever been made".

The European Union moved to protect the agreement by vowing to take steps to immunise European firms doing business with Tehran from any US sanctions. EU foreign policy chief Federica Mogherini said Europe will abide by the deal.

Meanwhile, state-run oil marketing firms have kept prices of transport fuel unchanged since April 24, temporarily suspending the dynamic daily pricing regime, despite a rise in international rates, to avoid panic among consumers, Indian Oil Corp (IOC) Chairman Sanjiv Singh said on Tuesday.

On Wednesday, the price per litre of petrol was Rs 74.63 and of diesel Rs 65.93 -- rates of both have remained unchanged since April 24.

The price of the Indian basket of crude oils, composed of 70 per cent sour grade Oman and Dubai crudes and the rest by sweet grade Brent, has gone upwards of $70 a barrel last month.

Sanjiv Singh said it was a mere coincidence that the spike in international rates and the company's decision to put a lid on prices comes just ahead of the Assembly elections in Karnataka on Saturday.